Secreted TGF- family proteins play key roles in cell differentiation, and deregulation of TGF- family signaling is considered as a mechanism of a variety of diseases, including cancer. Following receptor activation, intracellular signaling effectors, called Smads, relay the signals that lead to activation or repression of TGF- family target genes. Considerable insight has been gained on how Smads are activated and their function is regulated through phosphorylation, teaching us that functional crosstalk of Smads with kinases dictates the gene expression responses to TGF- family proteins. Protein methylation has emerged as a post-translational modification that exerts key roles in defining protein functions, at the level of signaling mediators and at the level of epigenetic regulation of transcription. However, there is no knowledge on functional interactions of Smads with methyl transferases. Among a variety of methyl transferases tested, we found specific interactions of three of them with selected Smads. We hypothesize that functional interactions with methyl transferases define Smad signaling, through Smad methylation thus regulating Smad activity, or through alterations of TGF- -induced transcription responses. We propose three Aims, each focusing on the functional interaction of an individual methyl transferase with Smads. Each methyl transferase targets selectively a defined type of Smads, either the inhibitory Smad6 or Smad7 (Aim 1), the common Smad4 (Aim 2), or the TGF- - activated R-Smad Smad3 (Aim 3). In Aim 1 we will define the role of the Arg methyl transferase PRMT1 in Smad6 and Smad7 function. We will characterize the methylation of Smad6 and Smad7 by PRMT1 and evaluate the role of PRMT1 in Smad6 and Smad7 function, and in TGF- - and BMP- induced, Smad-mediated transcription. In Aim 2, we will define the role of SMYD3 in TGF- /Smad signaling. SMYD3 methylates Lys4 of histone H3, which has been linked to enhanced transcription, yet was also shown to target a cell surface receptor. We showed that SMYD3 interacts specifically with Smad4, and propose to evaluate the role of this interaction in Smad4 function, and transcription regulation by the TGF- -activated Smad3/4 complex at target genes. We will thereby focus on the regulatory gene sequences of hTERT that are targeted by SMYD3 and TGF- signaling. In Aim 3 we will define the role of ESET/SETDB1, which methylates Lys9 of histone 3 in TGF- /Smad regulated gene expression. We have shown that ESET interacts with Smad3, but not the other Smads, and propose to explore the functional crosstalk between TGF- /Smad3-mediated transcription regulation and ESET, focusing on the expression of SnoN, an oncogene whose expression results in inhibition of TGF- signaling. These studies will provide paradigms for how methyl transferases regulate Smad signaling and the transcription responses to TGF- family proteins.